Benefits derived by a partner without the consent of other partners

(a) Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property. (b) This Code section applies also to the representatives of a deceased partner engaged in the liquidation of the affairs of the partnership as the personal representatives of the last surviving partner. (Code 1981, § 14-8-21, enacted by Ga. L. 1984, p. 1439, § 1.) COMMENT Note to Uniform Partnership Act This section states the partners’ liability for deriving unauthorized benefits from the partnership. Prior Georgia Law There was no precisely comparable provision. This section is consistent with the general provision on acquisition of antagonistic rights in a confidential relationship, O.C.G.A. § 23-2-59. A confidential relationship is defined in O.C.G.A. § 23-2-58 to include ‘‘the relationship between partners.’’ Section 14-8-21, by imposing a duty in connection with formation and liquidation, clarifies prior Georgia case law. Compare Hancock v. Gunter, 195 Ga. 646, 24 S.E.2d 772 (1943) (no fiduciary duty to speak where partnership had not commenced at the time of the nondisclosure) with Bennett v. Smith, 108 Ga. 466, 34 S.E. 156 (1899) (fiduciary duties recognized in connection with dissolution of a partnership). Section 14-8-21 also clarifies prior Georgia law by providing that a partner holds wrongfully appropriated funds as a trustee. Official UPA This section is the same as the official version. Cross-Reference Actions against the partners to enforce the right in this section: § 14-8-22(3).